Comments on business development and Southern Illinois University at Carbondale by a local.

Wednesday, February 14, 2007

Sheila's drive for bigger and more intrusive government - Code Enforcement.

She is a Senator's daughter after all, bigger and more expensive government is the family business.

From her plan -

2. Build code enforcement into an effective, efficient system, one that responds to needs of the entire community. Pay for the system, in part, through a small inspection fee.

This is just genius! Hire a small army of code inspection people, go door to door and let the people pay for it! I'm wondering how many houses in my 1960 era neighborhood could pass this kind of inspection? :) This is exactly the reputation that Carbondale needs, we are already a place that is way more expensive to do business then anywhere else in Southern Illinois and now we can go even further down the path of unreasonableness.

In the real world, that everyone who wasn't born with a silver spoon in their mouth lives in, code enforcement on buildings is a tricky thing. Honest people know the building codes exist for a reason and follow them. Sometimes this costs more money, but how much does having your house burn down cost? The problems is there are always a few people who want to cut corners, make a few extra short term bucks and ignore our fairly common sense laws. In the last 20 years, the biggest example of this is a company called Home Rentals, owned by Henry Fisher.

We all know about Henry's story and his current location. We also know that Home Rentals has been nothing short of a juggernaut of property purchasing. A partial list of what they own - building next to 710 (that houses Attitude Designs), Corner Dinner building, Walk the Line building, Booby's Subs, old Papa C's building on College, office building next to it on College, all the big apartments on College between University and Popular, all the houses behind the DQ, check out their ads for what if for rent in the student papers in a few months.

Home Rentals also used to own the "American Tap" building on Illinois avenue. Since the city's purchase of the American Tap building is Sheila's only hope of winning this election, it should be called out. Yes, you can expect a whole series of posts about Sheila's BS about "the Tap" purchase. Isn't it amazing how someone running on a platform of ethics can throw mud at the same time? Guess it would be impossible for her to win on merit. Daddy's name and mud are her game.

The problems with enforcement on Home Rentals (in the old days) and the like is they just don't follow the rules very well. Since all the city can do is write them up and fine them, maybe try to keep people from being in the building, it is fairly easy to ignore what the city wants. This is one of the downside of one of the most important rights of US citizens, our strong rights of property owners. If you need examples of how to do this, feel free to challenge this idea in the comments and I'll explain it there.

If the city were to put through a law like this, it might have the good result of cleaning up a few rental units, but at what cost? The market forces are working on fixing this problem already. New apartments are going up all over and houses that in bad shape are sitting empty. As usual, market forces in student housing are powerful in Carbondale. Of course, if SIU had 25,000 students again, people would be living in basements, on dirt floors like the old days.

Does the city really need a tax increase and more city employees? Does the city need to become the city of crazy code inspection and draconian anti-business laws? A clear difference between Brad and Sheila, Sheila puts forward plans that just will not work in the real world, because she doesn't understand the real world (IMHO). The unintended consequences of this plan would more then negate any positives.

3 comments:

Anonymous
said...

Making a committee to enforce building codes will keep Carbondale from looking run down. Furthermore, the better the housing the more likely you are to get former students to stay in the area. The more people you have living in one area, the better off the economy of that area will be. Furthermore, instead of run-down houses sitting empty, the run-down houses would be forced to be up to code. Oh, what will we do when Carbondale actually becomes an attractive place to live?

You think the city is a home owner's association or something? There are laws and Carbondale does a better job enforcing them then anyone else in the region. "Looking run down"? Just idiotic.

The reason former students don't stay in the area is because there are no jobs. If there were jobs, then there would be housing. Don't you people know anything about capitalism? Carbondale is a great place to live, but there are no jobs, so people leave.

Committees are for people who want to get nothing done and waste their time. I guess you would feel good about yourself while you accomplished nothing, so that is something.

Get a grip. Read this blog, go back a few months. Soak up the capitalistic flair. :)

As I understand it, you believe that the market will solve the problem of run-down houses in Carbondale, and your concern with Sheila Simon's proposal is that additional set of red tape and fees would be a disincentive businesses to locate in Carbondale.

I don't agree with the first belief. Once a landlord owns a property outright, a bad landlord can charge way less than everyone else and still make a nice profit. In most parts of Carbondale, property values are low enough that a landlord doesn't have to be all that wealthy to own properties outright, so it isn't that hard to be a bad landlord. All he has to do is find the student who is naïve enough to believe his unwritten, verbal promises about the repairs that are going to happen and clueless enough to not check around the Web for complaints about the landlord. In a student housing market that turns over every few years, it isn't too hard to find that naïve student. Instead of sitting empty, that house in bad shape is occupied with a poor student who learned a lesson the hard way. Yes, the bad landlord could make a lot more money by charging market rates and maintaining his building, but he's lazy and thinks of the rentals as passive income rather than as a business. Perhaps a more ambitious landlord will buy the lazy landlord out and create better housing in the area, but the market doesn't guarantee that outcome, and it certainly doesn't guarantee that the buyout before the building becomes an eyesore.

What about Sheila Simon's proposal? It would fall on all landlords, both good and bad. In some ways it could hurt the good landlord more. While the good landlord calls the tenants in advance to let them know that the inspector is coming, the bad landlord just shows up one day with an inspector. While the good landlord walks around with the inspector to find out exactly what the inspector looks for and what remedies the city considers acceptable, the bad landlord chats with his friends on his cell phone. Although the inspection is a hassle for both landlords, the good landlord has a lot more extra work than the bad landlord who just pays his fine and does minimal repairs.

Since it is in the city's interests to avoid blighted properties, it is sensible to do something to prevent them rather than paying off property owners after the blight. Perhaps Sheila Simon's proposal isn't the best way to prevent blight, but doing nothing isn't either.

One thing that I've thought of is to make inspection worth more to the landlord than just avoiding a fine. Restaurants in southern California prominently display a simple letter grade that they get from the health inspector. Restaurants with poor letter grades lose business. Should rental properties in Carbondale prominently display their ratings from the building inspector? Would that be enough to keep the naïve student from renting the cheap apartment from the bad landlord?

About Me

A software engineer by trade, Peter co-founded Bsquare Corporation of Bellevue, WA (Nasdaq - BSQR). His wood shop is stored on pallets, in his new building, so nothing is happening in the shop. Expect work in manufacturing and other industries that might be successful in a rural community.